House Republicans are out with their tax bill, and it includes one of the agriculture’s top goals, with a caveat.
Republicans plan to eliminate the estate tax. But, in a move that will ease the loss of revenue and help counter Democrats’ criticism the bill favors the rich, the GOP will double exemptions for estate taxes and then end the estate tax by 2024…tape
Ways and Means Committee member and South Dakota Republican Christie Noem, whose dad was killed in a farming accident, defended ending the estate tax.
Meanwhile, the GOP bill would lower the top tax rate on a farm and other businesses that pay taxes through the individual income-tax code, as so-called ‘pass-through’ businesses. The new rate would be 25 percent, down from a top rate of 39.6 percent. Though, it was still unclear what the proposal will do to prevent other firms or wealthy individuals from reorganizing to abuse the new rate.
The GOP plan would also allow companies to immediately expense capital investments, such as new equipment, for five-years—another key goal of agriculture. Small businesses could also still write off loan interest.
Noem highlighted those provisions, as well.
More generally, the GOP proposal would cap the deduction for state and local property tax payments at 10-thousand dollars, but prevent taxpayers from deducting state and local income tax payments for the first time.
It would maintain deductions for mortgage interest for existing loans and newly purchased homes up to $500,000.
401 K plans and IRAs would maintain their current tax treatment, a move pushed by the president.
The proposal would also end the “personal exemption” that helps families with children, but create a new ‘family tax credit.’ The “standard deduction” would basically double, encouraging its use over itemized deductions.
Senate Finance Committee Republicans will move their own bill, but both chambers hope to pass legislation by Thanksgiving and send a final bill to President Trump for his signature by year’s end.
From the National Association of Farm Broadcasting News Service.